TOKYO – Japan’s factory output likely rose in June for the first time in three months after China’s COVID-19 curbs eased, a Reuters poll showed on Friday.
Japanese industrial production likely expanded 3.7% in June from the previous month, according to the median forecast of 17 economists in the poll.
The first monthly increase since March, however, would be insufficient to offset May’s bigger-than-expected 7.5% decline and April’s 1.5% drop.
“Production of general machinery and electronic devices is estimated to have recovered, thanks to the lifting of the lockdown in Shanghai. Automobile production also has probably picked up, because of an easing of the component shortage,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.
Shanghai came out of lockdown at the beginning of June.
Analysts were still cautious about the recovery outlook for Japan’s manufacturing activity.
“The semiconductor shortage has become a chronic phenomenon, and (firms’) concern about commodity price inflation and accelerating interest rate rises in major overseas economies remains high,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
The Reuters Tankan survey this month found Japanese manufacturers’ business mood remained subdued, underscoring a narrowing chance of a robust recovery from the pandemic in the world’s third-largest economy.
Elsewhere, the poll of economists found that Tokyo’s core consumer price index – a leading indicator of Japanese price trends – was probably 2.2% higher this month than a year ago, showing inflation accelerating from June’s 2.1% annual increase. Rising food prices are a factor.
June retail sales were estimated to have been up 2.8% on a year earlier, marking a fourth month of annual expansion.
Japan’s unemployment rate was seen down again in June, at 2.5%, after a surprise uptick to 2.6% in May, while the jobs-to-applicants ratio likely rose 0.01 to a level of 1.25 in June, the poll also showed.
The government will release the factory output and retail sales data on July 29 at 8:50 a.m. (July 28, 2350 GMT). Tokyo CPI and the jobs data are due on July 29 at 8:30 a.m. (July 28, 2330 GMT).
(Reporting by Kantaro Komiya; Editing by Bradley Perrett)
